(a) An aggrieved person who has suffered a direct
monetary loss by reason of the conversion of trust funds by any licensed real
estate broker shall be eligible to recover, subject to the limitations of this
Article, the amount of trust funds converted and which is otherwise
unrecoverable provided that:

(1) The act or acts of conversion which form the basis
of the claim for recovery occurred on or after September 1, 1979;

(2) The aggrieved person has sued the real estate
broker in a court of competent jurisdiction and has filed with the Commission
written notice of such lawsuit within 60 days after its commencement unless the
claim against the Real Estate Education and Recovery Fund is for an amount less
than three thousand dollars ($3,000), excluding attorneys' fees, in which case
the notice may be filed within 60 days after the termination of all judicial
proceedings including appeals;

(3) The aggrieved person has obtained final judgment in
a court of competent jurisdiction against the real estate broker on grounds of
conversion of trust funds arising out of a transaction which occurred when such
broker was licensed and acting in a capacity for which a license is required;
and

(4) Execution of the judgment has been attempted and
has been returned unsatisfied in whole or in part.

Upon the termination of all judicial proceedings including
appeals, and for a period of one year thereafter, a person eligible for
recovery may file a verified application with the Commission for payment out of
the Real Estate Education and Recovery Fund of the amount remaining unpaid upon
the judgment which represents the actual and direct loss sustained by reason of
conversion of trust funds. A copy of the judgment and return of execution shall
be attached to the application and filed with the Commission.

(b) For the purposes of this Article, the term
"trust funds" shall include all earnest money deposits, down
payments, sales proceeds, tenant security deposits, undisbursed rents and other
such monies which belong to another or others and are held by a real estate
broker acting in that capacity. Trust funds shall also include all time share
purchase monies which are required to be held in trust by G.S. 93A-45(c) during
the time they are, in fact, so held. Trust funds shall not include, however,
any funds held by an independent escrow agent under G.S. 93A-42 or any funds
which the court may find to be subject to an implied, constructive or resulting
trust.